Advice needed - Mortgage PPI

[citybloke]

Hi

 

I took out a mortgage in 1999 through a broker, who also sold me a mortgage protection policy for “Accident, Sickness, Redundancy and Unemployment” – The policy would pay £1130 each month in the event of a successful claim.

 

Now the broker knew I was a self-employed IT contractor, as he was also arranging my mortgage, yet was happy to sell me the policy shown below.

 

I changed mortgage mid 2006 and also changed to another PPI with another company.

 

It wasn’t until I read about all the PPI cases on this site, that I looked at my original policy.

 

As an IT contractor, the broker would have known that I work on fixed term contracts.

 

Could someone take a look at the policy details below and let me have their opinion on whether it would have paid out if I had been unemployed due to a fixed term contract ending.

 

In the “What is not covered ? - Exclusions” section, it states they will not pay if a fixed term contract ends.

 

Many thanks !!

 

Citybloke

 

CERTIFICATE OF INSURANCE

This insurance has been arranged by Connell Mortgage Services with Cornhill Insurance PLC ("We'), and will become effective on the

acceptance of the Application form and payment of the first premium as stated in your Schedule of Insurance.

Eligibility

You are eligible for insurance cover provided that on the date of 'exchange of contracts' for your property, you are:

(i) having, or have had, a mortgage arranged by Connell Mortgage Services

(ii) between 18 and 60 years of age

(iii) actively in permanent continuous employment (minimum 16 hours per week) or self employment and have been so for the 6 months

period immediately prior to 'exchange of contracts' for your property.

(iv) accepted for insurance having completed an Application form

(v) a permanent resident within the United Kingdom

Joint Mortgages

In the case of a joint mortgage, cover can either:

(a) apply to one person and insurance benefits will only apply to that person, or

(b) apply to both borrowers, in which c-as-e-y-o-u-c-an--se-le-ct-t-he--pr-oportion of to-ta-l-b'-enefit for._eac-h -person

WHAT IS COVERED?

I. Disability Benefit

Should you become disabled and remain so during the period of

insurance for 30 consecutive days or more which prevents you from

working, We will pay monthly, one thirtieth of the monthly benefit (the

amount stated in your Schedule of Insurance) for each day of disability,

except for the first 30 days for which nothing is payable.

We will continue to pay the benefit until the period of disability ends or a

maximum of 12 months have been paid in total.

2. Involuntary Unemployment Benefit

Should your position at work become involuntarily unemployed and

remain so during the period of insurance for 30 consecutive days or

more We will pay monthly, one thirtieth of the monthly benefit (the

amount stated in your Schedule of Insurance) for each day of

involuntary unemployment, except for the first 30 days for which nothing

is payable. We will continue to pay the benefit until the period of

involuntary unemployment ends or a maximum of 12 months have been

paid.

If you return to work or have received the maximum 12 monthly benefit

you will requalify for Involuntary Unemployment Benefit again when you

have been in gainful employment for at least 6 consecutive months.

3. Unemployment Benefit (self-employed customers only)

We will pay similar benefits as described in 2.above for involuntary

unemployment benefit, provided that you have ceased trading and can

supply evidence of 'cessation of trading' to the Inland Revenue.

REDUNDANCY ADVICE HELPLlNE

We have arranged a Redundancy Helpline to provide you with expert

advice 24 hours a day on any legal, tax or benefit queries arising from

.- f-ed;;ndancy. The s-efvice is tree, you only pay for the cost of the phone

call.

To use the service, call 0990 234500 and introduce yourself as a

customer of Connell Mortgage Services.

HOW TO CLAIM?

Please contact the Scheme Administrator, Wessex Insurance

Management Limited, Jewry House, Jewry Street, Winchester, Hants

S023 8RZ. Telephone Number: (01962) 877818, Facsimile: (01962)

841015 for a claim form.

Completed claim forms are to be returned to the Scheme Administrator

within 50 days from the start of your claim or as soon as is reasonably

possible thereafter. You must provide supporting evidence for your

disability or unemployment claim by way of a qualified Medical

Practitioner's report, or termination letter from your immediate past

employer at your own expense. We will pay for a medical examination if

it is deemed appropriate.

In order to claim the involuntary unemployment benefit or

unemployment benefit described above you must be registered for

unemployment at the Department for Employment and Education and

have entered into a Job Seekers agreement, and be entitled to Job

Seekers allowance or National Insurance credits by virtue of being

unemployed.

LAW

English Law will apply unless otherwise agreed in writing.

WHAT IS NOT COVERED?

The initial 30 day period from the day you last worked is not

covered.

Exclusions

We will not pay any benefits for your disablement, involuntary

unemployment or unemployment if they are caused by any of the

following:

_ war, riot, revolution or other similar events

HIV or any HIV related illness including AIDS

pregnancy or childbirth or related complications

any physical defect, chronic or continuing disease or

previously diagnosed conditions and any related complaint for

which you were treated within the 12 months before you

applied for this insurance.

deliberately injuring yourself or alcohol abuse or the use of

drugs unless they are prescribed by a registered medical

practitioner (other than for the treatment of drug abuse).

We will not pay an unemployment or involuntary unemployment

claim if it is caused by any of the following:

If unemployment is a normal part of your job or arises because

your fixed term, temporary or seasonal contract ends, or you were

aware of as likely to be impending at the start of this insurance, or

within the first 120 days of this insurance.

If you are outside of the United Kingdom, the Channel Islands or

the Isle of Man for more than 30 consecutive days.

You are dismissed for gross or deliberate misconduct.

You choose to become unemployed or you take voluntary

redundancy .

You are self-employed and have not permanently stopped trading.

MORE ABOUT C.M.P.P.

Please read this document in conjunction with your Schedule of

Insurance.

Cover will continue until your mortgage payments cease, or until

you reach your normal retirement age at work, so long as you

continue to pay your monthly premiums as shown in your

Schedule of Insurance.

We may alter premium rates or the basis of cover providing We

give you 30 days notice in writing of this change, but this will not

affect any claim in the course of payment for which monthly

premiums must continue to be paid.

COMPLAINTS PROCEDURE

If you have a disagreement about this insurance, please contact:

The Scheme Administrator, Wessex Insurance Management

Limited at the address shown above.

If the matter is not resolved then contact:

The Schemes Manager, Cornhilllnsurance PLC, Corn hili House, 6

Vale Avenue, Tunbridge Wells, Kent TN1 1EH.

If tile matter is still not resGived, then contact either:

The Association of British Insurers, Consumer Information

Department, 51 Gresham Street, London, EC2 7HQ or The

Insurance Ombudsman Bureau, City Gate One, 135 Park Street,

London, SE1 9EA. Telephone Number: (0171) 9284488.

This insurance is underwritten by Corn hill Insurance PLC, registered in England NO.84538. Registered Office 32 Cornhill, London EC3 3LJ.

Cornhllllnsurance PLC is a member of The Association of British Insurers and The Insurance Ombudsman Bureau

[hellhasnofury]

Hello and welcome,

 

Read your post, eyes googled now. Who sold you this policy was it an independant advisor or a company:eek:

[citybloke]

Hi

Well not 100% sure on that one to be honest.

When I was looking for a house to buy in 1999, I was dealing with an estate agents called Connells in Essex and my mortgage and PPI were all sorted out in the Connells estate agency office.

 

I ended up buying a new build office direct from a builder, but still used Connells for finalising the arrangement of my mortgage and PPI.

 

The mortgage PPI correspondence comes from a company called Wessex Insurance services and the policy is underwritten by Cornhill insurance.

 

Irrespective of who sold me the policy, do you think I would have been able to claim the £1130 per month if I had been unable to find work when my fixed term contract expired ?

 

I will search for any more info I have.

 

I paid about £71 per month for 78 months = £5538 taken from me.

 

Citybloke

[citybloke]

Hi again

 

Just checked bank statements and all the monthly payments were made by direct debit to Connells estate agents - This is who arranged my mortgage and mortgage PPI.

 

Thanks

 

Citybloke

[hellhasnofury]

Hi again

 

Just checked bank statements and all the monthly payments were made by direct debit to Connells estate agents - This is who arranged my mortgage and mortgage PPI.

 

Thanks

 

Citybloke

 

Excellent, you know now who you are after.

 

Good luck

[citybloke]

OK...so i now know who exactly I need to write to.

 

I also know exactly how much I have been charged.

 

At the time I took out my mortgage and mortgage PPI, I had only been self-employed for about 6 months !....so probably would have been considered to be high risk I would have thought.

 

Does anyone have an opinion on the PPI policy, as to whether it would have paid out if my fixed term contract ended and I couldn't find more work ?

 

I will check other PPI posts to get a better idea of how to word my initial letter....had a look in the template library but there are no PPI templates there.

 

Cheers

 

Citybloke

[stan5131]

Template Letter 1

 

 

[Your address]

The Complaints Department

[Lender’s address]

[Date]

 

Dear Sir/Madam,

 

Ref: [Your PPI policy number]

 

I believe I have been mis-sold a payment protection insurance policy and would like to request a full refund of my premiums, plus interest paid.

 

I took out a £xxx loan/credit card at your […. Branch] on [date] and also bought a payment protection policy which would cost me an extra £xxx over the life of the loan. [The name of the salesperson who sold me the policy is ...] The total amount of my premiums plus interest is £ xxxx.

 

I am [self-employed/work as a contractor/unemployed/retired] and therefore will not be eligible for any payments from the PPI if I find myself unable to meet my debt repayments.

 

Possible additional paragraphs – include the one which applies

 

 

[Your salesperson knew this at the time of sale but did not point out to me that this would make the insurance policy useless to me.]

 

 

or

 

[Your salesperson did not check my personal circumstances at the time of sale, which they are under obligation to do. If they had done, they would have realised that a PPI policy was useless to me.]

 

 

Insurers are under an obligation to ensure that the policy they are selling is appropriate to that customer and clearly, as my employment situation means I am unable to claim on the policy, you have not fulfilled this requirement.

 

I am requesting a full refund of all my insurance payments, plus interest, which total [£ xxx].

 

If I do not receive a favourable response from you I will pursue this claim through the Financial Ombudsman.

 

Yours sincerely

 

 

[Your signature]

 

 

 

Template Letter 2

 

 

 

[Your address]

The Complaints Department

[Lender’s address]

[Date]

 

Dear Sir/Madam,

 

Ref – policy number

 

I believe I have been mis-sold a payment protection insurance policy and would like to request a full refund of my premiums, plus interest paid.

 

I took out a £xxx loan/credit card at your [branch name] branch on [date] and also bought a payment protection policy which would cost me an extra £xxx over the life of the loan. [The name of the salesperson who sold me the policy is …] The total amount of my premiums plus interest is £ xxxx.

 

When I took out the loan, I was told that my application would be refused if I did not also buy a PPI policy. The Financial Services Authority’s advice to consumers is that, while it does not breach FSA guidelines, a borrower should not be refused a loan if they choose not to buy an insurance policy.

 

Possible additional paragraphs – include any which apply to you

 

 

[i also told your salesperson that I had adequate insurance cover through a separate income protection policy.]

 

[i said I did not need the PPI as my employer provides a generous illness and redundancy package.]

 

[You are not allowed to make PPI a condition of taking out the loan unless you include the costs of PPI in the quoted interest rate, which you did not do.]

 

[in forcing me to buy this policy, you have also breached paragraph 8.6 of the Banking Code, to which you are a signatory.]

 

I do not believe being forced to buy this policy as part of the loan was a fair and reasonable obligation as I did not need this insurance and said at the time of taking the loan that I did not want it.

 

 

I am requesting a full refund of all my insurance payments, plus interest, which total [£ xxx].

 

If I do not receive a favourable response from you I will pursue this claim through the Financial Ombudsman.

 

Yours faithfully,

 

[Your signature]

[stan5131]

Also, I would suggest your first port of call would be to phone the actual insurance company and ask for clarification as to whether or not they would pay out.

[citybloke]

Stan

 

Cheers for that.

 

I would also like to charge them interest......I don't know what rate of interest to charge, as the PPI has nothing to do with the mortgage company (Skipton B.S.).

 

Any idea on what rate of interest to go for ?

 

Thanks

 

Citybloke

[stan5131]

Was this a single premium ie they loaned you an extra xxxx amount to pay for the ppi then added it to mortgage and added interest on the ppi amount? Or was it monthly continuing payments?

 

If the latter, I would suggest going for statutory 8% as allowed by the County Courts which you can only claim a filing action stage. This is just my personal opinion and someone else may advise you otherwise.

[citybloke]

Hi

It was a monthly payment of £71.19 per month.

 

What do you think of the policy wording in the "What is not covered ?" section of the policy - They were fully aware I was self-employed.

 

Thanks

 

Citybloke

[citybloke]

I wondered what people thought about the wording from the policy :-

 

WHAT IS NOT COVERED?

The initial 30 day period from the day you last worked is not

covered.

Exclusions

We will not pay any benefits for your disablement, involuntary

unemployment or unemployment if they are caused by any of the

following:

_ war, riot, revolution or other similar events

HIV or any HIV related illness including AIDS

pregnancy or childbirth or related complications

any physical defect, chronic or continuing disease or

previously diagnosed conditions and any related complaint for

which you were treated within the 12 months before you

applied for this insurance.

deliberately injuring yourself or alcohol abuse or the use of

drugs unless they are prescribed by a registered medical

practitioner (other than for the treatment of drug abuse).

We will not pay an unemployment or involuntary unemployment

claim if it is caused by any of the following:

If unemployment is a normal part of your job or arises because

your fixed term, temporary or seasonal contract ends, or you were

aware of as likely to be impending at the start of this insurance, or

within the first 120 days of this insurance.

If you are outside of the United Kingdom, the Channel Islands or

the Isle of Man for more than 30 consecutive days.

You are dismissed for gross or deliberate misconduct.

You choose to become unemployed or you take voluntary

redundancy .

You are self-employed and have not permanently stopped trading.

 

Where it states "If unemployment is a normal part of your job or arises because

your fixed term, temporary or seasonal contract ends, or you were

aware of as likely to be impending at the start of this insurance, or

within the first 120 days of this insurance."

This says to me that they won't pay out if my fixed term contract ends and I cannot find work - They knew I was an IT contractor working on fixed term contracts !

 

Any thoughts on the above ??

 

Thanks

 

Citybloke

[stan5131]

Citybloke, I think you are correct. Your argument is that if the terms, conditions and exclusions were properly explained to you, you would never have opted for such an extortionately expensive policy that frankly was not worth the paper it was written on. There are thousands of cases just like yours where institutions are so greedy for their commission they dont give a t*** about the benefits to their customers.

 

GE were fined £600,000 recently by Office Fair Trading for mis selling PPI and not establishing the needs of their customers.

[hellhasnofury]

Citybloke, I think you are correct. Your argument is that if the terms, conditions and exclusions were properly explained to you, you would never have opted for such an extortionately expensive policy that frankly was not worth the paper it was written on. There are thousands of cases just like yours where institutions are so greedy for their commission they dont give a t*** about the benefits to their customers.

 

GE were fined £600,000 recently by Office Fair Trading for mis selling PPI and not establishing the needs of their customers.

 

Hello, I think stansfield has hit the nail on the head. You are just one of the Thousands of cases, BUT You have now found out and it is your opportunity to do something about it:D

[citybloke]

Thanks guys!

 

Just wanted confirmation that I was reading the policy correctly.....i've read it over and over and over !!.......and as far I can see it isn't worth the paper it's written on...so I will be writing to them this week.

 

I will post an update when i get a reply....no doubt it will be telling me to get lost!!

 

I'm not going to let this go without a big fight.

 

Thanks to all !

 

Citybloke

[hellhasnofury]

Thanks guys!

 

Just wanted confirmation that I was reading the policy correctly.....i've read it over and over and over !!.......and as far I can see it isn't worth the paper it's written on...so I will be writing to them this week.

 

I will post an update when i get a reply....no doubt it will be telling me to get lost!!

 

I'm not going to let this go without a big fight.

 

Thanks to all !

 

Citybloke

 

Hello,

 

You will probably get more than one reply telling you, well you signed, you did not cancel etc etc, but don't be put off, keep up the pressure.

 

I have just had a gogw of 50% but if they are prepared to give me that much, if I persist they will give me more.

 

Stand strong on this, keep the faith

never give up, never surrender

Power to the people

etc etc

[TideTurner]

From TimesOnline

 

 

 

Banks braced for billions in claims

 

The City watchdog has given consumers the green light to claim for ‘useless’ debt insurance, which many people don’t even know they have. Once they do, the revolt could be bigger than bank charges. By Clare Francis

 

Banks face being hit with billions of pounds in compensation claims for “useless” debt insurance in a consumer revolt that could be bigger than that over bank charges.

Millions of people with overpriced loan insurance — supposed to cover repayments if you can’t work — have been given the green light to claim for mis-selling after two announcements from the Financial Services Authority (FSA) in the past month.

Insiders say the scale of the scandal could eventually dwarf bank charges and even endowment mis-selling. There are some 20m loan insurance policies worth £5.5 billion in Britain, and one industry insider, who wished to remain anonymous, thinks as many as 70 per cent could have been mis-sold. If so, the industry could face claims worth up to £3.85 billion from 14m people.

By contrast, about 2m people are thought to be reclaiming ‘illegal’ overdraft charges at a cost to the industry of up to £1.2 billion a year, according to Credit Suisse, an investment bank.

function pictureGalleryPopup(pubUr l,articleId) { var newWin = window.open(pubUrl+'templ ate/2.0-0/element/pictureGalleryPopup.jsp?i d='+articleId+'&&offset=0 &&sectionName=MoneyCon sum erAffairs','mywindow','me nubar=0,resizable=0,width =615,height=655'); }Related Links

 

·Protection cover in the dock again

·The biggest scandal since endowments

Consumers have not yet started to revolt against debt cover, though, because so few know they have it: firms often add it to your loan without asking.

This is exactly what happened to Nasim Kanji, 58, a university lecturer from Oxhey in Hertford-shire. She did not realize she had been charged £9,000 for insurance for a £62,000 loan secured on her home until she went to Chase de Vere Mortgage Management, a broker, to remortgage.

Not only did the policy account for 15 per cent of the loan, but she would never had needed it anyway because she had savings set aside in case she lost her job.

Kanji said: “I had no idea I had been sold the insurance until it was pointed out by my adviser. I was horrified when I found out how much it had cost me. There is no way I would have taken out such insurance because I have assets that would cover my payments were anything to happen which stopped me working.”

Simon Tyler at Chase de Vere said: “This was terrible advice and there is no way such a policy was suitable.”

Consumers are therefore being urged to check their loan, credit-card and mortgage agreements to see if they have been sold protection insurance without realising it. If so, you have a very good case to lodge a claim.

An announcement last week by the FSA, the City watchdog, could open the floodgates. It said that people who had been sold single-premium policies, where the cost of the cover is paid upfront and often added to the loan, could now be eligible for refunds if they cancelled the loan part-way through the term.

In the past insurers pocketed the money. Now customers who have cancelled policies and got very little back are being urged to complain to their providers.

Matthew Turley, 30, pictured with his girlfriend, Rachael House, and their two children, Mitchell, 10, and Mia, 3, could be entitled to a refund. He took out a car loan for £4,700, but was charged an additional £5,612 for debt cover. Once this and the interest were added to the loan, his repayments would have totalled £14,537 — three times the amount he borrowed. This was not explained to him but he soon realised the mistake and repaid the loan. Even then he still had to pay £6,740 — £2,000 more than he borrowed.

He is in the process of trying to reclaim the £2,000 plus the interest he was charged.

The scandal goes beyond single-premium policies, though. The FSA indicated last month it thinks all payment-protection insurance has been systematically mis-sold for several years.

In a speech last month, Stuart King of the FSA said: “Our work in the PPI [payment-protection insurance] market has demonstrated it has not been sold correctly over a prolonged period. We have seen too many real cases of individuals who do not appear to have been fairly treated when purchasing PPI.”

Claims firms such as Brunel Franklin think the scandal could be even bigger than the FSA realises. They are just starting to win payouts for clients who have been mis-sold debt insurance, and they reckon the average refund could be in the region of £2,000 to £3,000, compared with about £1,400 for bank charges.

Ian Allison of Conkers, Brunel’s claims-handling firm for PPI, said: “The FSA’s speech was pretty explicit for a regulator, but I still don’t think it realises how huge this will be. We are just seeing the tip of the iceberg.”

The Competition Commission is also looking into PPI, following an inquiry by the Office of Fair Trading that concluded consumers had been stung for some £1 billion through the sale of overpriced debt cover. Since only one in four policies pay out, the cost to the consumer is even higher.

About 7m PPI policies are sold each year by banks and building societies when people take out loans, mortgages and credit cards. High-street stores also push the cover to customers buying electrical goods using instore finance arrangements. However, consumers can pay up to 10 times more for cover from these firms than they would from a stand-alone provider such as the Post Office or Paymentcare.

The policies are designed to cover your loan repayments if you can’t work due to an accident, sickness or redundancy, but they have many exclusions that are rarely explained at the point of sale. For example, PPI does not cover the self-employed, students or housewives. Nor does it pay out if you are sacked or have preexisting conditions that are not declared on the application form. Certain illnesses, such as stress and back pain, are also routinely excluded.

Teresa Fritz at Which?, the consumer lobbyist, said: “When the insurance was sold, the adviser should have explained it and investigated whether it was suitable for you. In most cases this hasn’t happened, so anyone who has PPI and doesn’t think it’s right for him or her should complain to the company that sold it.”

Ways to reclaim your money

Payment protection insurance — was I mis-sold?

If you were sold a policy that you later discovered was unsuitable, perhaps because you are self-employed, you can claim for mis-selling. You can also claim if you were never told about the cover or it was not explained fully.

What does the FSA’s latest announcement mean?

It relates to single-premium PPI policies where customers are charged a lump sum for cover that is added to their loan. The FSA estimates about a third of policies have been sold in this way. Many include ‘nil-refund’ clauses — if the cover is cancelled during the term, the policyholder is not eligible for a refund. This has been banned.

All new single-premium policies must include a ‘partial refund’ clause. The size of the refund will depend on how far into the term you are when you cancel. People who have made claims on their policies will not be eligible. Firms must also apply partial-refund conditions to all existing policies. Millions of customers who have cancelled policies in the past and received no refund are now being urged to ask their insurers for their money back.

So how do I lodge a claim?

Write to the company that sold you the policy. Ask for the cost of the PPI, plus any interest, to be refunded. You may also be eligible for claiming lost payouts, if you were turned down on a policy that you should never have been sold. The firm must reply within eight weeks. If it fails to do so, or you are not satisfied with its response, take your case to the Financial Ombudsman Service (financial-ombudsman.org.uk) or the small-claims court.

Bank charges — am I eligible?

If you have been charged a penalty fee for going overdrawn without permission or for having a direct debit refused, you can ask for the money back. If the Office of Fair Trading imposes a cap on the amount that can be charged, you are likely to get only the difference back. In the meantime, banks are refunding the full amount.

 

This refers to all insurances including PPI's and Mortgage Indemnity Guarantees which are often sold as 'House Insurance'

 

 

Tide